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Question about ISA's
Former Member
Posts: 1,876,323 The Mix Honorary Guru
Right, I'm coming into some money in the next few months (personal injury claim) and I'd like to spend some and save some. I've heard about students putting their loans into an ISA and using the interest?
Basically, I have no idea about banking, so in layman's terms, what's an ISA and how does it work??
Basically, I have no idea about banking, so in layman's terms, what's an ISA and how does it work??
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Comments
:no: you can't.
even then. its because ISA are subject to special interest/tax, so your only allowed one. likewise thats why there are rules about how much can be invested in any one financial year.
:yes: You can have money invested in more then one ISA but the rules are *very* complex so its stays in line with the legal tax free allowances. ISA providers have to send regular returns to HMRC who will check the data and ask for duplicates to be closed, and if it does you will be charged tax on any interest earnt.
You can only put £3K a year in until 5th April, after that you can invest £3.6K a year tax free (worth thinking about if the compenstation is going to be over £3K, Illora) Use the best buy tables to get a good interest rate, buliding societies tend to have better rate then the high street banks. Over a couple of years the interest does build quite nicely, especially as its paid tax free.